FOLK2FOLK has delivered more than £11.3m in gross interest payments to investors during financial year 2019. The company has seen a year on year increase in the amount of interest earned by investors via its platform, with 2019 delivering its biggest pay-out to date.
FOLK2FOLK provides loans to credit-worthy businesses needing finance to grow, develop or diversify, who don’t fit the bank lending criteria. Its loans are funded by its community of experienced lenders, typically people of retirement age seeking a secured investment at an attractive rate to supplement their monthly retirement income, as part of a balanced investment portfolio. It also has several local authorities registered as investors motivated to use their cash reserves to help businesses within their constituency.
In an environment of low interest rates, fluctuating share prices and absent dividends, a property secured loan investment offering a fixed interest rate of 6.5% p.a. remains an attractive option to FOLK2FOLK investors.
A sum of £50,000 in a high street bank saving account may earn up to £500* gross in interest over the year; if invested via FOLK2FOLK, the same sum would typically earn £3,250. For larger sums, the difference is greater. On £250,000 investors would typically earn £16,250 gross in interest via FOLK2FOLK, and up to £2,500* via a high street bank savings account. FOLK2FOLK investments are secured against land or property with a maximum LTV of 60%.
Around 90% of FOLK2FOLK’s investors usually reinvest once their loan investment redeems, supplying the finance needed to help credit-worthy British businesses wanting to grow, develop or diversify.
Roy Warren, FOLK2FOLK Managing Director, said: “Our investor confidence remains strong even during the pandemic. We have an extremely high reinvestment rate and while some investors, whose investments have recently redeemed, may choose to temporarily ‘sit out’, others continue to reinvest and indeed add further funds on our platform.”
“We have continued to register new investors and the £12.3m of lending we’ve facilitated since 1 March and throughout the pandemic has been funded by both new investors and existing. We believe it is crucial for our country’s recovery to keep the economy moving, by facilitating loans and income generating investments, and we’re heartened that our investors appear to share that view.”
FOLK2FOLK has kept its secondary market open during the pandemic to ensure the opportunity for liquidity remains for its investors, and default rates remain low with no investors having lost any capital.
Of the £11.3m, around 8% was via FOLK2FOLK’s Innovative Finance ISA (IFISA). The typical fixed interest rate investors earn via the platform is 6.5% p.a.
*based on a bank interest rate of 1% p.a.
Capital at risk. No FSCS. Past performance is not a reliable indicator of future trend.